Correlation Between Turkiye Petrol and Ekiz Kimya

Can any of the company-specific risk be diversified away by investing in both Turkiye Petrol and Ekiz Kimya at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Turkiye Petrol and Ekiz Kimya into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Turkiye Petrol Rafinerileri and Ekiz Kimya Sanayi, you can compare the effects of market volatilities on Turkiye Petrol and Ekiz Kimya and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Turkiye Petrol with a short position of Ekiz Kimya. Check out your portfolio center. Please also check ongoing floating volatility patterns of Turkiye Petrol and Ekiz Kimya.

Diversification Opportunities for Turkiye Petrol and Ekiz Kimya

-0.04

Correlation Coefficient

Turkiye Petrol  Ekiz Kimya

Good diversification

The 3 months correlation between Turkiye and Ekiz is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Turkiye Petrol Rafinerileri and Ekiz Kimya Sanayi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ekiz Kimya Sanayi and Turkiye Petrol is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Turkiye Petrol Rafinerileri are associated (or correlated) with Ekiz Kimya. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ekiz Kimya Sanayi has no effect on the direction of Turkiye Petrol i.e., Turkiye Petrol and Ekiz Kimya go up and down completely randomly.

Pair Corralation between Turkiye Petrol and Ekiz Kimya

Assuming the 90 days trading horizon Turkiye Petrol Rafinerileri is expected to generate 6.92 times more return on investment than Ekiz Kimya. However, Turkiye Petrol is 6.92 times more volatile than Ekiz Kimya Sanayi. It trades about 0.05 of its potential returns per unit of risk. Ekiz Kimya Sanayi is currently generating about 0.07 per unit of risk. If you would invest  6,084  in Turkiye Petrol Rafinerileri on October 4, 2024 and sell it today you would earn a total of  8,526  from holding Turkiye Petrol Rafinerileri or generate 140.14% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Turkiye Petrol Rafinerileri  vs.  Ekiz Kimya Sanayi

Turkiye Petrol Rafin

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Turkiye Petrol Rafinerileri has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong forward indicators, Turkiye Petrol is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Ekiz Kimya Sanayi

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ekiz Kimya Sanayi has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Ekiz Kimya is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Turkiye Petrol and Ekiz Kimya

The main advantage of trading using opposite Turkiye Petrol and Ekiz Kimya positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Turkiye Petrol position performs unexpectedly, Ekiz Kimya can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Ekiz Kimya will offset losses from the drop in Ekiz Kimya's long position.

The idea behind Turkiye Petrol Rafinerileri and Ekiz Kimya Sanayi pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.